Minnesota hospitals struggle with new bundled payment model

Earlier this year, Minnesota reduced its annual reimbursement for its General Assistance Medical Care (GAMC) program from $219 million to $91 million, according to MPR News.  The program provides medical coverage for many low income residents of the state.

The article reports that under the new structure, hospitals receive lump sum payments to hospitals for GAMC patients, instead of the previous fee for service structure. The goal is to rein in costs while preserving health care services for low-income Minnesotans. So far, only four Minnesota hospitals have agreed to the new payment model, and these hospitals have put a cap on the number of GAMC patients that they will see. 

Hospital administrators say that the state could reduce costs and provide better care by enrolling in the early expansion of the federal Medicaid program, an option offered under the new federal health care overhaul.

(Sources: MPR News, http://minnesota.publicradio.org, September 15, 2010; The Advisory Board Daily Briefing, http://advisory.com, September 17, 2010)